Monthly Archives: August 2015

Selected Economic Indicators for Missouri and the Plains States

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Gross domestic product (GDP) means:                         Plains States

…total value of goods and services produced during a period not including foreign earned income.

Bureau of Economic Analysis (BEA) 2014 data on changes in GDP in Missouri and the other six (6) Plains States shows an average 1.3 percent growth, considerably lower than the 2.2 percent national average.

  • Missouri                                                                    0.9
  • North Dakota                                                           6.3
  • South Dakota                                                           0.6
  • Nebraska                                                                   0.7
  • Kansas                                                                       1.8
  • Iowa                                                                           0.4
  • Minnesota                                                                 1.4

But there is a side to the economic story besides GDP. Alan Cole and Scott Drenkard wrote July 8, 2015 about “The Real Value of $100 in Each State.”

The value of goods purchased for every $100 spent varies from state to state and the District of Columbia.

Cole and Drenkard noted the often direct relationship between higher income and higher prices, but not always. For example, North Dakotans earn higher income but pay lower prices.

Adjusting incomes for price level can substantially change our perceptions of which states are truly poor or rich.              

Nationwide the District of Columbia had lowest purchasing power per $100 based on 2013 numbers – at $84.96; and Mississippi had the greatest with $115.21.

Median household income (2014) in the District of Columbia is fifth highest in the country at $65,124, yet the high cost of goods and services reduces purchasing power by almost $10,000.

On the other hand, Mississippi has the lowest median income (2014) among the fifty states and the District of Columbia – at $36,919. Yet, lower prices increase its purchasing power by more than $5,600.

Likewise, Missouri’s relatively low prices increase purchasing power of its median income (2014) of $45,247 by nearly $5,500.

The seven (7) Plains States enjoy greater purchasing power than most states with higher median incomes. For each $100 spent, value of goods and services is:

  • Missouri                              $112.11
  •  North Dakota                     $109.41
  • South Dakota                     $114.16
  •  Nebraska                             $110.50
  • Kansas                                 $110.13
  • Iowa                                     $110.74
  • Minnesota                          $102.46

Personal Income Changes in Plains States: First Quarter 2015

Average nationwide personal income growth was 0.9 percent. The private sector suffered 0.6 percent income loss compared to the last quarter (Oct-Dec) 2014, but government sector income grew by 0.5 percent in the same period.

Farm income declined in the Plains States of South Dakota, Nebraska, Kansas and Iowa. Iowa personal income declined 1.2 percent in the first three months of the year, more than any other state.

Missouri personal income increased by about one percent, and Minnesota personal income increased by less than one percent.

Federal highway funding law has “other purposes”

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President Obama signed H.R. 3236 into law on July 31, 2015. Short title is “Surface Transportation and Veterans Health Care Choice Improvement Act of 2015.”

To provide an extension of Federal-aid highway, highway safety, motor carrier safety, transit, and other programs funded out of the Highway Trust Fund, to provide resource flexibility to the Department of Veterans Affairs for health care services, and for other purposes.

Interestingly, the bill combines provisions for short-term funding of highway transportation with others about veterans’ health care.

And, beyond that as reported in the Journal of Accountancy, among the other purposes are changes to annual IRS filing deadlines for certain businesses (Section 2006).

Partnerships – Tax years beginning after 12/31/2015

  • Calendar-year partnerships must file Form 1065 – U.S. Return of Partnership Income – by March 15;
  • Fiscal-year partnerships must file by the 15th day of the third month after close of the fiscal year.
  • The IRS can authorize a maximum extension of six months for Form 1065.

C Corporations – Tax years beginning after 12/31/2015 or after                          12/31/2025

  • Returns due on 15th day of fourth month after corporation’s year end (vice current third month after corporate year closes);
  • Calendar-year corporations can get five-month filing extension until 2026;
  • June 30 year-end corporations can get seven-month filing extension until 2026;
  • Effective for returns due for tax years beginning after December 31, 2015; EXCEPT for corporations with June 30 year end new dates become effective for tax years beginning after December 31, 2025.

Section 2003 modifies mortgage information reporting form requirements; Section 2004 amends provisions on reporting basis of property inherited from a decedent; and Section 4001, et seq., establishes the “Veterans Choice Program”.

Find H.R. 3236 in its entirety here.

Magnetic strip to computer chip – EMV credit cards

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EMV Chip

A majority of cardholders in Europe and Asia have used “smart cards” with embedded EMV chips for over a decade.

“EMV” means Europay, Mastercard and VISA, the chip card producers and developers of global standards for the technology.

The head of Smart Card Alliance, Randy Vanderhoof says: “The chip is a microprocessor computer just like any intelligent device — like a phone or a tablet or a laptop.”

Rather than swiping credit cards, the Wall Street Journal advises:

“…you will insert your card into a slot, just like people do in much of the rest of the world, where the machine will read a microchip, not a magnetic stripe. You’ll still be signing for the time being, but the new system also enables the use of PIN numbers, if card issuers decide to add them to their cards.”

The U.S. issues about 25 percent of credit cards worldwide – projected to reach over 600 million by the end of 2015, but only last year began the migration to the more secure EMV chip. After EMV cards were introduced overseas the previously much higher levels of fraud declined, so fraudsters changed their targets to the U.S. market. Consequently, nearly 50 percent of all credit card fraud happens here.

Liability shifts for fraudulent card use

Merchants who accept credit card payments will have to upgrade their card reading equipment by October 1, 2015 or accept potential liability for fraudulent credit card transactions. This is a change from current practice holding banks that issue the credit cards liable. Determinations of liability will favor the party with the highest level security technology.

Depending on the cost to upgrade to EMV-chip readers, some businesses may decide not to. Instead, in cases where upgrades are unaffordable, some small business owners may decide to revert to cash-or-check only transactions.

Creditcards.com says gas stations will have until 2017 to upgrade to EMV cards “…because installing the new card readers with explosive gasoline around could be complicated.” The link leads to the site’s informational videos on this and related FAQs.

Two local banks explain EMV

UMB

  • Chip card technology creates a one-time transaction code per in-person purchase, which makes duplication and card copying very difficult.
  • Many merchants will update their Point-Of-Sale (POS) systems to accept both magnetic stripe and chip cards. Chip-enabled terminals will allow the chip cards to encrypt the data shared during each in-person transaction. This means hackers will be much less likely to access full payment data from payment terminals.

Equity

  • Convenient Traveling: Chip cards make traveling easier and more convenient with its wide acceptance. The traditional magnetic stripe on the back allows you to continue using it at stores without chip-enabled terminals.
  • Simple & Easy: Either insert your chip card into the store’s terminal or swipe the magnetic stripe as prompted by the merchant.
  • If prompted to insert your chip card, look for the slot on the bottom-front of the terminal and insert your card face up, chip first. Leave your card in the terminal until the transaction is complete. The terminal will prompt you to either enter a PIN or sign to validate your identity.
  • Don’t forget to take your card out when prompted.

Many credit card issuers have already begun issuing the new EMV cards; others will replace the magnetic strip cards when the cardholder’s current card expires. For more specific information, contact your card issuer.

Happy National Watermelon Day!

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WatermelonHoliday Insights.com and many other sources recognize today, August 3rd, as National Watermelon Day. The Gardner’s Network, however, says it falls on August 18.

So, if your local community organizers failed to set up a pit spitting contest today, there is no reason not to organize one for mid-month that brings everyone together for a fun contest.

Gardner’s Network reports giant watermelon can grow to approximately 200 pounds, but there are more commonly grown baby varieties that weigh in at more manageable sizes between two and ten pounds.

For those who don’t already know and are interested to learn, the Network offers instructions on how to plant and grow watermelon.

Little known – and seldom thought about – facts including the ones below, plus how-to videos on slicing, cubing and dicing, and juicing watermelon can be found at watermelon.org.

• Egyptians grew the first watermelons about 5,000 years ago
• Watermelon is more than 90 percent water
• Watermelon is the number one melon consumed in the United States
• In explorer days, canteens were made of watermelons
• Hope, Arkansas holds an annual watermelon contest; the largest ever winning entry was in 2005 and weighed almost 270 pounds.
• Numerous cities in several states hold watermelon festivals from May through September.
• United States is the 5th largest watermelon producer worldwide.
• According to the Farm Service Bureau, Missouri ranks seventh nationwide for watermelon production.

National Watermelon Association has nine active chapters, and the Watermelon Times links to both official and fun melon-related sites.

Despite all the fame and acclaim watermelons receive today, the Peach gets an entire month! Yes, August is National Peach Month. Peaches and watermelon… sounds like a great smoothie recipe any day or month of the year!